Apatha Company Has Assets of $600,000,liabilities of $250,000,and Equity of $350,000.It

question 189

Multiple Choice

Apatha Company has assets of $600,000,liabilities of $250,000,and equity of $350,000.It buys office equipment on credit for $75,000.The effects of this transaction include:

• A)Assets increase by $75,000 and expenses increase by $75,000.
• B)Assets increase by $75,000 and expenses decrease by $75,000.
• C)Liabilities increase by $75,000 and expenses decrease by $75,000.
• D)Assets decrease by $75,000 and expenses decrease by $75,000.
• E)Assets increase by $75,000 and liabilities increase by $75,000.

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Definitions:

Capital Cost Allowance

A tax deduction in some jurisdictions that allows businesses to claim depreciation on tangible capital assets as an expense against taxable income.

Cost-Cutting Project

An initiative aimed at reducing expenses in order to improve profitability.

Reduction in Costs

Efforts or strategies implemented to decrease expenses and improve efficiency in a business operation.

Sunk Cost

A cost that has already been incurred and cannot be recovered, which should not influence future business decisions.